Although
there is a feeling that the Japanese-U. S. talks have finally reached a
deadlock, we do not believe that it should be considered as an absolutely
hopeless situation. We are of the impression that the United States worded
their memorandum in such a way as to permit a ray of hope to penetrate through.

The
general public has been becoming more and more favorable to the President's
foreign policy, until today it is being supported overwhelmingly. The program
of war time industrial production has been making satisfactory progress, and it
may be said that the general public is taking a more optimistic view of the
European war. This last is due to the surprisingly good showing the Soviet
Union has been making in her war efforts. The United States is well satisfied with
that.

At
the same time, however, both the United States and Great Britain are fearful
lest the Soviet Union enter into an independent peace. The United States and
Britain are giving determined aid to the Soviet Union in order to prevent such
a peace from materializing, and, if possible, to enable the Russians to hold
out over the winter and resume fighting next spring. The Atlantic war has shown
a definite turn in favor of Britain; submarine losses have increased and hence,
loss to shipping has dropped radically. Due to the vastly strengthened air arm
of the British and because of her power on the seas, England herself is
practically safe from invasion.

(Part
2)

That
all is not perfect for Germany in the war on her eastern front may be seen from
the fact that the various Balkan countries show some hesitancy. At the same
time unrest is on the increase in the various occupied areas and Italy's war
strength is constantly on the decrease. Apparently it is only through German
intervention and pressure that Italy is prevented from entering into a separate
peace. The effectiveness of the blockade will increase as the war is prolonged,
and the same situation as existed in the last war will probably be brought
about.

Such
are the optimistic predictions being made here with regard to the final outcome
of the war.

Should
Germany succeed in bringing about an independent peace with the Soviet Union at
this time, Germany would be able to amply reinforce her forces directed toward
England. This would place England in a critical position once again and this is
probably the one thing the United States does not want. (Translator's note:
From this point to end of Part 2 badly garbled; guess work contained in
translation). For such a development will probably involve the United States
very deeply in the Atlantic war and it is possible that the United States would
lose ships because of it. If such a situation materializes, the United States
would for the first time realize the imminence of the war to herself and may then-but
not until then-take a slightly more conciliatory attitude toward Japan.

From
the Japanese point of view, it would be most favorable if the Soviet Union does
sue for an independent peace and if, as a result, the Germans launch a new
phase of the war on the Atlantic, such developments would undoubtedly have the
most favorable effects on U. S.-Japanese relations.

(Part
3)

It
is true that the Konoye message relieved to a certain extent the very critical
situation between the United States and Japan for it had a tendency to squelch
those few in the United States who advocate going to war against Japan first.
This sentiment has been kept smothered since then and at the same time the
message did, indirectly, tend to get the United States to become further
involved in the Atlantic.

On
the other hand, however, the United States has not decreased her economic
pressure against Japan one iota. It should be carefully noted that the United
States is proceeding along a policy of making this her threatening power.
Should the United States continue along her present economic policy, without
resorting to the force of arms, she shall gain her objectives of a war against
Japan without once resorting to a battle. Moreover, I am of the opinion that
unless there is a radical change in the world situation or unless Japan changes
her foreign policy, the United States will not alter this policy of hers
against Japan.

(Part
4)

Of
the three major topics involved in our negotiations, two have been agreed upon
for all practical purposes. (Hull is an advocate of free trade and believes
that "bloc" economics is the cause of wars. He is trying to force the
British Empire to accept this philosophy at the present time). Thus the only
remaining problem is that concerning the evacuating of our troops. In view,
however, of the conditions you referred to in your message #622*, and upon
taking into consideration the undoubted confusion in the future of the world,
it will become apparent that a complete evacuation would be an impossibility.
We do not believe that it will be an impossible task for us to come to some
acceptable understanding with the United States at a later date.

In
view of the fact that the "understanding" between the United States
and Japan hinges on this one point, I would appreciate your giving this phase
your further consideration.

Incidentally,
in the course of a friendly discussion with a Cabinet official, he advised me
that both the President and the Secretary of State are sincere in their desire
to bring about an "understanding" between Japan and the United States
and that the matter of the removal of the troops is the only thing that blocks
the attainment of this goal.

In
the opinion that the matter involved is of much importance, I submit my humble
opinions concerning it to you.